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July 9th, 2009
07:05 AM ET

Economy could make Obama, Democrats vulnerable in 2010

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/07/09/obama.economy.romans.art.jpg caption="President Obama maintains that investing in key areas such as health care will help stabilize the economy."]

NEW YORK (CNN) - They are two presidents from different parties but have striking similarities

Former President Ronald Reagan and current President Obama are incredibly popular, and both faced rising unemployment early on.

Reagan's experience could be instructive for Democrats today; the GOP lost 26 seats in the 1982 elections. Reagan's popularity could not trump double-digit unemployment.

If we look back at 1982, as soon as the unemployment rate hit 10 percent, there was a political dynamic that changed significantly ... and it became much harder for the incumbent party to be able to make their case," said Daniel Clifton, head of policy research at Strategas, an investment strategy and policy research firm.

But Reagan was fighting joblessness, inflation and high interest rates. Obama has a full plate, but inflation and high interest rates are not on it.

Nonetheless, the jobless rate today is at 9.5 percent, which is above the peak of 8 percent the White House predicted earlier this year. The administration now concedes 10 percent is likely in the next couple of months.

While some economists have long forecast jobless rates this high, Vice President Joe Biden now admits that the administration "misread how bad the economy was."

Not exactly, according to the president.

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Filed under: Economy
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